TaxTMI 
TaxTMI 
2022 (6) TMI 990
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....try of Corporate Affairs having its registered office at D.S.C.- 319 DLF South Court Saket New Delhi 110017. As per the pleadings set forth in the petition one Moser Baer India Private Ltd. (hereinafter referred as Corporate Debtor) was allotted a commercial plot no. 66 admeasuring 2,70,201 square meters at Udyog Vihar Greater NOIDA, District Gautam Budh Nagar by the respondent no. 2 Greater NOIDA Industrial Development Authority (hereinafter referred as GNIDA) for a period 90 years. Record further reveals that initially the lease deed was executed on 26.06.2001 between GNIDA on one part and Corporate Debtor on the other part setting out the terms and the conditions (covenants) of the leased land in question. It is further pleaded in the petition that an application purported to be u/ s 7 of the Insolvency and Bankruptcy Code 2016 (hereinafter referred to as IBC Code) was instituted by a Financial Creditor being M/s Alchemist Assets Reconstruction Company Limited bearing no. I.B.378 (P.B.) 2017 for initiating Insolvency Resolution Process against Carporate Debtor. The said application was admitted on 14.11.2017 by National Company Law Tribunal (NCLT) and one Mr. Debendra Singh was ....
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....ame was also confirmed by NCLT hence the request so acceded by the GNIDA cannot be accepted. It has been further averred in para 14 of the writ petition that the petitioner wanted to start with its project and thus under extreme pressure of the GNIDA, the petitioner deposited the arrears of lease rent and interest thereon beng Rs. 5,80,28,025/- for issuance of Transfer Memorandum on 27.10.2020 under protest. In support of the said contention petitioner has appended as annexure- 10 a letter sent by it addressed to GNIDA which is being termed as protest letter along with details of the deposits so sought to be made by it. 4. According to the petitioner finally the Transfer Memorandum was issued by GNIDA on 24.12.2020, a copy whereof has been appended at page 79 of the writ petition. 5. Lamenting quiescent demeanor in non refund of the amount which has been deposited under protest the petitoner is before this court by means of the present writ petiton seeking following reliefs:- "I. issue a writ, order or direction in the nature of mandamus directing the respondent no. 2 to refund the amount of Rs. 5,80,28,025/- along with intrest @ 18% per annum from the date of deposition till d....
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....020. 11 conditions have been given in the transfer memorandum. 15. That the contents of para 16, 17, 18, 19 and 20 of the writpetition are not admitted hence specifically denied. The M/s Moser Baer shojld have taken prior permission from the Greater Noida Authority and they should have informed that the company has becomebankrupt and they are going to insolvency. Since the petitioner company purchased the plot should have also inquire from the Authority what are the dues are pending agianst the plot. Since the petitioner compay has entered in the shoes of M/s Moser Baer, hence they have to clear all the deus. It is specifically denied that petitioner is not entitle for any refund of the amount of Rs. 5,80,33,025/-." 7. In nutshell, the stand taken by the GNIDA in their counter affidavit is that GNIDA was at no point of time apprised of the fact that Corporate Debtor lessee became bankrupt and proceedings were drawn under IBC Code- 2016 against it culminating into auction of the demised land and transfer of the same, therefore, auction in favour of the petitioner is illegal. It has been further alleged in the counter affidavit that once the petitioner stepped into the shoes of th....
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............................ hereinafter called the lessee which expression shall unless the context does not admit, include his/her/their/it's heirs, executors, administrators, representatives and permitted assigns/it's successors and permitted assigns of the other part. A. Partnership Firm /Proprietorship Firm/Company functioning in the name of M/s. Moser Baer Indi Ltd.- Having its Registered Office Situated at 63, Ring Rutid. Through its Director Sri N.K. Chaudhary aged.48 years S/O Sri Raj Mangal Chaudhary I-11 Sector 27 Noida he reinafter called the lessee which expression shall, unless the context does not admit, include his/he:/their/it's heirs, executors, administrators, representatives and permitted assigns/it's successors and permitted assigns) of the other part. II (a)......... Provided that the interest shall be computed at the rate mentioned above on the total amount of the balance outstanding from time to time from the date of allotment and shall be payable half yearly (As per payment plan enclosed with allotment latter) on the schedule mentioned above. Provided that if the installments together with the interest accruing thereon are not paid by tor on the due....
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....ng of any one or more of the under mentioned contingencies. (a) If the lessee or any other person(s) claiming through or under suchlessee commits breach of any of the covenants or conditions contained in this Deed and such breach is not remedied following receipt of a written notice from the lessor specifying the nature of breach and providing the lessee reasonable opportunity to remedy the breach: (b) If the lessee or any other person(s) claiming through or under suchlessee fails and/or neglects to observe punctuality and/or perform any of their/its/his/her obligations stipulated under this Deed: (c) If the lessee or any other person(s) claiming through or under suchlessee whether actually or purportedly transfers, creates, alienates, extinguishes, relinquishes, mortgages or assigns the whole or any part of his right, title or interest whether in whole or any part thereof, except in the manner stipulated in this Lease Deed. (3) (a) That the Lessor and the Lessee hereby agree that all sums due under this deed from the Lessee on account of premium rent, interest or damages for use and occupation or any other account whatsoever shall on the certificate of the Lessor which shall b....
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....ed 28th November 2007 subject to the changes mentioned in the transfer memorandum and otherwise from time to time. 11. That if the Transferee does not abide by the terms and conditions of allotment/leases and building regulation and direction or any other rules framedby the authority, the lease may be cancelled by the GNIDA and possession of the demised premises may be taken over by the GNIDA and the Transfereein such an event will not be entitled to claim any compensation in respect thereof. ARGUMENT OF PETITIONER 12. Sri Navin Sinha, learned Senior Counsel assisted by Sri Manu Khare, learned counsels for the petitioner have made manifolds submissions namely:- (a). The petitioner being a bonafide auction purchaser, purchased immovable asscets consequent to the auction/sale held in pursuance of the orders of NCLT after paying the bid amount cannot be fastened with any monetory liability which was attached with Corporare Debtor under Liquidation. (b). Once under the provisions of the IBC Code- 2016 claims were invited by Resolution Professional and GNIDA did not get his claim registered then it is estopped to claim the said amount as the same is hit by the doctrine of waiver ....
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.... past dues of the company in liquidation. According to the learned Senior Counsel who appears for the petitioner harmonious interpretation is to be given so as to give literal meaning while personifying that only those dues which are legal and payable, are to be included and not those dues and liabilities which are not to be paid or discharged particularly when there was latent and patent defects in the property which is being put to auction and the liabilies so attached to it, was at no point of time apprised or confornted to the petitioner who is a bonafide auction purchaser. Learned Senior Counsel in support of the said submission has relied upon the following judgments:- "1. Al Champdandy Industries Limited vs. Official Liquidator and Another reported in (2009) 4 SCC 486 2. Rana Girders Limited vs. Union of India and Others reported in(2013) 10 SCC 746 3. Haryana State Electricity Board vs. Hanuman Rice Mills Dhanauriand Others reported in (2010) 9 SCC 145 4. State of Karnataka and Another vs. Shreyas Papers (P) Ltd. andOthers reported in (2006) 1 SCC 615 5. Telangana State Southern Power Distribution Company Limitedand Another vs. Srigdhaa Beverages reported in (2020....
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....018, the GNIDA is not only necessary party but also has substantial interest therein as according to the term and covenant contained in the lease deed not only the lease rentals has to be paid but also in case of subletting or assigning of the lease in favor of the third person concurrence and approval of GNIDA is/was necessary. Sri Singh in order to buttress his contention has sought to argue that the petitioner being auction purchaser and claiming interest over the lease land premises is liable to make the payment of the past lease rentals and interest of late payment and also honour the commitments so engrafted in the lease deed and Transfer Memorandum and petitioner cannot wriggle out from the contractual obligation and the dues so attached with the lease deed as the petitioner herein has stepped into the shoes of Corporate Debtor. It has been further argued that contractual obligation cannot be a subject matter of adjudication in the present proceedings particularly when the present petition is being sought to be filed for getting a judicial seal in resiling and wriggling from contractual obligation. Sri Singh further argued that in view of the contractual obligation set out i....
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....COURSE" basis?" SYMPOSIUM 20. We have heard the submissions of learned counsel for the parties and perused the record. 21. Undisputedly, the petitioner herein is an auction purchaser who had purchased the lease hold rights of the Creditor Debtor through public bidding pursuant to a judicial order passed by NCLT in liquidation proceedings purported to be under IBC Code-2016. It is further not in dispute that GNIDA is the lessor and Creditor Debtor is/ was a lessee. None of the parties have disputed the fact that the Creditor Debtor was in-dues with respect to lease rentals which also exposed it to penal interest. The only question which is to be decided in the present proceeding is as to whether the petitioner being the auction purchaser is liable to pay the arrears of rentals and interest thereon from a date anterior to the acceptance and confirming of bid by the NCLT/Execution of Transfer Memorandum on 24.12.2020. These questions are to be answered in the light of the question so framed by this Court for determination of the issue as extracted hereinabove. Ancillary and Incidental questions are to be answered which are interwoven with each other which are relatable to the impor....
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.... to penal interest. Learned counsel for the parties have not disputed the fact that the lease deed dated 26.06.2001 executed between GNIDA and Corporate Debtor is in existence though subsequently other lease deeds were executed on 22.03.2002, 05.09.2002 and supplementary lease deed on 28.11.2007 wherein the terms and the conditions so mentioned in the lease deed dated 26.06.2001 stood intact and applicable. 26. Now the question arises how the words "AS IS WHERE IS", "AS IS WHAT IS", "WHATEVER THERE IS", AND "NO RECOURSE" as stipulated in certificate of sale issued by Liquidator on 11.09.2019 is to be interpreted. It is further not in dispute that the petitioner itself approached the GNIDA for grant of Transfer Memorandum and when the GNIDA insisted for payment of past rentals and interest thereon the same was paid by the petitioner under protest (though disputed by GNIDA) and eventually, on 24.12.2020 Transfer Memorandum was executed wherein in Clause 4 of the same the petitioner accepted the fact that he is bound by the terms and condition (covenant) as contained in the lease deed dated 26.06.2001 and further in Clause 7 of the same the fact that after transfer of the demise land....
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....eloper, that is development of land into layout of sites, inviting applications for allotment by assuring formation of a lay out with amenities and delivery of the allotted sites within a stipulated time at a particular price, is completely different from the auction of existing sites either on sale or lease. In a scheme for development and allotment, the allottee has no choice of the site allotted. He has no choice in regard to the price to be paid. The development authority decides which site should be allotted to him. The development authority fixes the uniform price with reference to the size of plots. In most development schemes, the applications are invited and allotments are made long before the actual development of the lay out or formation of sites. Further the development scheme casts an obligation on the development authority to provide specified amenities. Alternatively the developer represents that he would provide certain amenities, in the Brochure or advertisement. In a public auction of sites, the position is completely different. A person interested can inspect the sites offered and choose the site which he wants to acquire and participate in the auction only in re....
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....roads, water, sewerage etc. If the allottees were not interested in taking the commercial plots on "as is where is" basis, they should not have accepted the allotment and after having accepted the allotment on "as is where is" basis, they are estopped from contending that the basic amenities like parking, lights, roads, water, sewerage etc. were not provided by PUDA when the plots were allotted. Over and above, the facts would clearly indicate that there was not much delay on the part of PUDA to provide those facilities as well. As noted, the electrical works and health works were completed by 24.12.2002 and 22.11.2002 respectively and all the facilities like parking, lights, roads, water, sewerage etc. were also provided." 30. Yet in the case of Rajasthan State Industrial Development And Investment Corporation And Another Vs. Diamond & Gem Development Corporation Limited And Another reported in 2013 (5) SCC 470 in para 30 has observed as under:- "The terms and conditions incorporated in the lease deed reveal that, the allotment was made on "as-is- where-is" basis. The same was accepted by the respondent-company without any protest, whatsoever. The lease deed further enabled th....
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....covered by a purchaser during investigation. On the other hand, the second category is patent defects which are discoverable if the buyer would have carried out inspection. Here in the present case the defects falls under the second category, being patent defects as Court finds that on 24.09.2018 the public announcement was made by Liquidator inviting claims due from the Corporate Debtor wherein in item no. 5 the details of the demised premises in question was given. Further the sale notice for assets of the Corporate Debtor was also published which is annexure- 4 at page no. 45 wherein again description of the land was given. It is a matter of common knowledge that whenever a property is being sought to be sold through auction and the reserve price runs into crores of rupees (which in the present case is 145.67 crores) then it is clearly expected that purchaser might have got carried out inspection of the title deed as well as of the liabilities attached to it. The petitioner herein is a registered liability partnership company duly registered with Government of India Ministry of Corporate Affairs and thus, it becomes highly implorable and inconceivable that the petitioner was not....
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....tion so contained in the lease deed dated 26.06.2021 followed by subsequent lease deed so executed there on between the GNIDA and the Corporate Debtor was accepted by the petitioner while undertaking to comply with the terms and conditions and the obligations set out therein and the same became the basis of the sale certificate. 36. This Court finds that the words so employed in the sale certificate being "AS IS WHERE IS", "AS IS WHAT IS", "WHATEVER THERE IS" AND "NO RECOURSE" are to be interpreted in such a manner so as to give with a logical conclusion in the light of the instrument so executed between the parties while bounding the petitioner to clear the unpaid arrears of lease rentals as well as interest on delayed payment. 37. Answering to the question no. (iv) this Court has to bear in the mind the fact that the demise premise in question which has been put to auction is a lease land as already discussed earlier and the contractual obligation so set out and settled between the GNIDA and the Corporate Debtor which has not been disputed by any of the parties. More so, the petitioner being an auction purchaser by virtue of Transfer Memorandum dated 24.12.2020 coupled with the....
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....annot and does not hold out any guarantee or warranty in respect thereof. This is because he must proceed upon the basis of what the records of the company in liquidation show. It is for the intending purchaser to satisfy himself in all respects as to the title, encumbrances and so forth of the immovable property that he proposes to purchase. He cannot after having purchased the property on such terms then claim diminution in the price on the ground of defect in title or description of the property. The case of the Official Liquidator selling the property of a company in liquidation under the orders of the Court is altogether different from the case of an individual selling immovable property belonging to himself. There is, therefore, no merit in the application made on behalf of Triputi that there should be a diminution in price or that it should not be made liable to pay interest on the sum of Rs 1 crore 98 lakhs. " 40. The right of the lessor over the land leased out which is being put to liquidation, has also been matter of consideration before the Hon'ble Apex Court in the case of Phatu Rochiram Mulchandani Vs. Karnataka Industrial Area reported in 2015 (5) SCC 244 wherein th....
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.... was not impressed with the arguments that the Corporation was not aware of the winding up proceedings and for this reason it had resumed the possession of the industrial plot, after cancellation thereof, without obtaining the leave of the Court. Once the plea of ignorance was denounced, the court addressed the question as to whether the Corporation could have cancelled the allotment of industrial plot made in favour of the Company in liquidation and answered the same in the negative with the following observations:- "11. Now the only question before us is, whether after an order was made by this Court in winding up the respondent Company (Company in liquidation), the applicant Corporation could have ventured to cancel the allotment of industrial plot made in favour of the Company in liquidation? This could be answered only after noticing the provisions of Sec. 537 of the Act. 12. Section 537 of the Act, provides for avoidance of certain attachments, executions, etc. in winding up by or subject to supervision of Court. The winding up proceedings would commence from the date of presentation of the petition before this Court for winding up of the Company as envisaged under Sect....
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.... aspect further after discussing the judgment in M/s. Hanuman Silks10. 34. In M/s. Hanuman Silks v. Karnataka Industrial AreasDevelopment Board, AIR 1997 Kar 134 the said Company was allotted plots by the Board for which lease-cum-sale agreements were entered into on 18.8.1993 and 19.8.1993. The Company was to erect the factory within 12 months and to commence the production within 24 months (same conditions as in the instant case). The Company failed to commence the civil construction work and did not complete the construction nor commenced production by these stipulated dates. Show cause notices were given by the Board and after that the plots allotted to the Company were resumed on 25.7.1995. The Company filed the petitions for quashing of the letters of resumption. The High Court formulated two questions which arose for consideration. We are concerned only with the first question which was couched in the following terms:- (AIR p. 137, para 10) "10. (a) Whether the Board can take possession of the plots in the possession of its lessees, without having recourse to a civil suit for possession or to an eviction proceedings under the provisions of the Karnataka Public Premises (....
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....he Tribunal ofany of the properties or effects of the Company after such commencement shall be void. (2) Nothing in this Section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government. 38. It is clear from the above that prior permission of the Court isrequired in respect of any attachment, distress or execution put in force or for sale of the properties or effects of the Company. We are of the opinion that the serving of cancellation notice simplicitor would not come within the mischief of this section as that by itself does not amount to attachment, distress or execution etc. No doubt, after the commencement of the winding up, possession of the land could not be taken without the leave of the Court. Precisely for this reason the Board had filed the application seeking permission. But according to us no such prior permission was required before cancelling the lease. In fact, it is only after the cancellation of the leases that the Board would become entitled to file such an application under Section 537 of the Act. Had the Board gone ahead further and taken the possession, after the cancellation and then approached the Company ....
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....ween leasehold and freehold as in the case of former only possession is transferred and not the ownership or title, however, in the later ownership and possession stands transferred. 44. Recently in the case of Delhi Development Authority Vs. Karam Department of Finance Investment (India) Private Limited and Others reported in 2020 (4) SCC 136 the Hon'ble Apex Court in paragraph no. 13, 14, 15, 16, 20, 21, 22, 23, 24 and 25 has observed as under:- "13. In Perpetual Lease, granted to Shri Trilochan Singh Rana and Mrs. Rani Rana, one of the conditions provided that lessor may impose conditions to claim and recover a portion of the unearned increase in the value (i.e. the difference between the premium paid and the market value) of the residential plot at the time of sale, transfer, assignment or parting with the possession, the amount to be recovered being percent of the unearned increase. The relevant clause (4)(a) of the Perpetual Lease is as follows:- "(4)(a) The Lessee shall not sell, transfer assign or otherwise part with the possession of the whole or any part of the residential plot except with the previous consent in writing of the Lessor which he shall be entitled to r....
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....nment, lessor shall be entitled to claim and recover a portion of the unearned increase in the value. The unearned increase being the difference between the premium paid and the market value. The object behind the said clause was that a lessee when is permitted to transfer the leasehold rights, the lessor should not be deprived of the difference between the premium paid and the market value. The clause was inserted in the Perpetual Lease to compensate the lessor. The present is not a case where lessee is making any transfer or seeking any permission from the lessor to give his consent. 20. Learned counsel for the petitioner has relied on Clauses 1 and 2 of the Sale Deed, which are to the following effect:- "1. That in pursuance of the said auction and consideration of the sum of Rs. 1,08,05,000/- (Rs. One Crore Eight Lakh and Five Thousand only) already paid by the Vendor/Auction Purchaser to the Vendor as aforesaid, the receipt of which the Vendor hereby acknowledged, the Vendor hereby transfers, conveys and sells to the Auction Purchaser, the Vendee, by way of sale of that plot of land measuring 725 sq. yds. bearing No. 14 in Block A-2 in the lay out plan of Safdarjung Develo....
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....the words used in their strict, natural grammatical sense and that once the intention can be clearly understood from the words in the disposition clause thus interpreted it is no business of the courts to examine what the parties may have said in other portions of the document. Next it is urged that if it does appear that the later clauses of the document purport to restrict or cut down in any way the effect of the earlier clause disposing of property the earlier clause must prevail. Thirdly it is said that if there be any ambiguity in the disposition clause taken by itself, the benefit of that ambiguity must be given to the grantee, the rule being that all documents of grants must be interpreted strictly as against the grantor. Lastly it was urged that where the operative portion of the document can be interpreted without the aid of the preamble, the preamble ought not and must not be looked into. 13. The correctness of these principles is too well established by authorities to justify any detailed discussion. The task being to ascertain the intention of the parties, the cases have laid down that that intention has to be gathered by the words used by the parties themselves. In ....
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....age. The First Floor consists of 3 bed rooms, 3 bath rooms, store and a lobby over the garage. There are 2 floors each having a servant room W.O. and a cocking verandah. 3. Property No. A-8/23, Vasant Vihar, New Delhi. 36.60 Lacs This is a lease hold residential plot N. 23 in Street No. A8 in the lay out plan of Vasant Vihar of the Servants Cooperative. House Building Society Ltd., and measuring 150 Sq. yds alongwith the super structure build thereon. (Covered area 1350 Sq. Ft). 4. Property bearing House No. E- 444 (Ground Floor), Greater Kailash Part-II, New Delhi- 110048. 25.60 lacs All rights, titles and Interests in the dwelling unit on ground floor, and mazanine floor of House No. E-444, Greater Kailash, Part-II, New Delhi, together with undivided. Indivisible and impartible ownership right of 35% in the land underneath of the said building and including the followings :- 1. One drawing-cum-dining hall, three bed roomswith attached bath rooms, balcony, kitchen, storage space (servants Quarters) and servant's bath rooms on ground floor. 2. Front lawn and back courtyard on the groundfloor. &nb....
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....by GNIDA under IBC Code cannot be a ground to negate their claim particularly when the demised premises in question is leasehold and one of the condition for recognizing the petitioner being an auction purchaser as a lessee is making good the deficiency in the payment of lease rentals along with interest thereon. Learned Senior Counsel could not point out any of the provisions so as to fortify the legal submission that mere nonregistration of the claim before the competent authority under IBC Code coupled with the fact that Transfer Memorandum and sale certificate has been executed therein denuded the GNIDA from claiming the arrears and interest thereon. 46. Nonetheless, Section 55 1 (g) of the Transfer of Property Act, 1882 reads as under:- "(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing." 47. According to Section 55 1 (g) of the Transfer of Property Act, 1882 in absence of a contract to the contrary the buyer and the seller of im....
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....ts of the company are required to be distributed to the creditors in order of preference. As the respondent- Municipality was not a secured creditor, the impugned Judgment cannot be sustained. 29. Dues of the Municipality would also not even otherwise come within the purview of the crown debt. Even a crown debt could be discharged only after the secured creditors stand discharged. " 51. Sri Sinha next relied upon the judgment in the case of Rana Girders Limited (supra) in order to contend that the excise duty dues are not liable to be paid by the auction purchaser of the erstwhile company which was put to auction. The Hon'ble Apex Court in paragraph no. 23 observed as under:- "23. We may notice that in the first instance it was mentioned not only in the public notice but there is a specific clause inserted in the Sale Deed/Agreement as well, to the effect that the properties in question are being sold free from all encumbrances. At the same time, there is also a stipulation that "all these statutory liabilities arising out of the land shall be borne by purchaser in the sale deed" and "all these statutory liabilities arising out of the said properties shall be borne by the ven....
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....unt Polymers (supra), the terms and conditions of supply contained a provision (clause 21A) providing that reconnection or new connection shall not be given to any premises where there are arrears on any account, unless the arrears are cleared. In view of the said express provision, this Court distinguished Isha Marbles on the following reasoning: "15...This Court in Hyderabad Vanaspati Ltd. v. A.P. SEB [1998] 2 SCR 620 has held that the Terms and Conditions for Supply of Electricity notified by the Electricity Board under Section 49 of the Electricity (Supply) Act are statutory and the fact that an individual agreement is entered into by the Board with each consumer does not make the terms and conditions for supply contractual. This Court has also held that though the Electricity Board is not a commercial entity, it is entitled to regulate its tariff in such a way that a reasonable profit is left with it so as to enable it to undertake the activities necessary. If in that process in respect of recovery of dues in respect of a premises to which supply had been made, a condition is inserted for its recovery from a transferee of the undertaking, it cannot ex facie be said to be un....
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....edecessor in title or possession, as the amount payable towards supply of electricity does not constitute a `charge' on the premises. A purchaser of a premises, cannot be foisted with the electricity dues of any previous occupant, merely because he happens to be the current owner of the premises.... 12....When the purchaser of a premises approaches the distributor seeking a fresh electricity connection to its premises for supply of electricity, the distributor can stipulate the terms subject to which it would supply electricity. It can stipulate as one of the conditions for supply, that the arrears due in regard to the supply of electricity made to the premises when it was in the occupation of the previous owner/occupant, should be cleared before the electricity supply is restored to the premises or a fresh connection is provided to the premises. If any statutory rules govern the conditions relating to sanction of a connection or supply of electricity, the distributor can insist upon fulfillment of the requirements of such rules and regulations. If the rules are silent, it can stipulate such terms and conditions as it deems fit and proper, to regulate its transactions and de....
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....g concern and the Hon'ble Apex Court while interpreting Section 15 (1) of the Karnataka Sales Tax Act (1957) in paragraph nos. 17 and 22 observed as under:- "17. In the present case, since it is not a matter of dispute that there was only the transfer of individual assets of the Defaulting Company, rather than the Defaulting Company being sold as a going concern, in light of our expressed views, Section 15 of the KST Act is not attracted. The first limb of Mr. Hegde's arguments must, therefore, fail. 22. In the present case, firstly, no provision of law has been cited before us that exempts the requirement of notice of the charge for its enforcement against a transferee who had no notice of the same. It remains to be seen, therefore, if in the facts of the present case, the First Respondent had noticeactual or constructiveof the charge. At the outset, in the advertisement/notice dated 17.3.1992 issued by the Corporation, mention is only made of the sale of the Defaulting Company's assets and there is no indication, whatsoever, of any sales tax arrears. Further, the bid offer made on behalf of the First Respondent on 5.6.1992 specifically excludes any statutory liabilit....
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.... above noted paragraphs itself shows that the Hon'ble Apex Court has held that electricity dues are statutory in nature and as per terms and the condition of supply the same cannot be waved of. Infact the said judgment goes against the petitioner. 57. The next judgment cited is the case of Raman Roadways Private Limited (supra) the said judgment no where supports the case of the petitioner as the said judgment holds that property tax was merely a statutory dues without creating any encumbrances over the property and the same is not liable to be paid. 58. The judgments so cited by the learned Senior Counsel as referred to above are clearly distinguishable and do not apply in the present facts of the case particularly when there already exists specific Clause 3(b) under Chapter No. (IV) of the lease deed dated 26.06.2001 providing that the lessor shall have first charge upon the demise premises for the amount of unpaid lease rents and interest thereon and other dues of authority. Moreover, as discussed above the petitioner herein has accepted the terms and covenant contained in the lease deed and also signatory to the Transfer Memorandum date 24.12.2020 which even in fact became th....
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....the payment of costs) a party may be precluded from saying that it is invalid and asking to set it aside". (para 1508)." 62. The Hon'ble Apex Court in the case of Shyam Telelink Limited vs. Union of India, reported in (2010) 10 SCC 165 has observed as under: "23. The maxim qui approbat non reprobat (one who approbates cannot reprobate) is firmly embodied in English Common Law and often applied by Courts in this country. It is akin to the doctrine of benefits and burdens which at its most basic level provides that a person taking advantage under an instrument which both grants a benefit and imposes a burden cannot take the former without complying with the latter. A person cannot approbate and reprobate or accept and reject the same instrument." 63. The Hon'ble Apex Court in the case of Cauvery Coffee Traders, Mangalore vs. Hornor Resources (International) Company Limited , reported in (2011) 10 SCC 420 has held as under: "34. A party cannot be permitted to "blow hot and cold", "fast and loose" or "approbate and reprobate". Where one knowingly accepts the benefits of a contract or conveyance or an order, is estopped to deny the validity or binding effect on him of such contrac....
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....sion that a party cannot approbate and reprobate at the same time as once it becomes beneficiaries of certain documents/instruments then the said party cannot elect to honor the commitments of certain parts which are beneficial to it and wriggle out of those conditions which puts liability upon it. 66. Nevertheless, Transfer Memorandum was executed on 24.12.2020 and the petitioner signed the same and in absence of the any challenge to the same the petitioner is bound by it and it has to comply with the contractual obligation in-toto. The Hon'ble Apex Court in the case of R. K. Mittal and Others vs. State of U.P. and Others reported in 2012 (2) SCC 232 in paragraph no. 53 has observed as under:- "53. Reverting to the case in hand, we may notice that the lease deed executed in favour of the predecessor-in-interest of R.K. Mittal and the other appellants had contained specific stipulations that the lessee will obey and submit to all directions issued, existing or thereafter to exist, as obeyed by the lessor. The erection of the structure was also to be in accordance with the approved plans. Clause (h) of the lease deed specifically provides that the constructed building shall be us....
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.... Bihar and Others reported in 1 977 (3) SCC 457 in paragraph nos. 12, 13, 14 and 15 observed as under:- "12. The Patna High Court had, very rightly divided the types of cases 'in which breaches of alleged obligation by the State units agents can be set up into three types. These were stated as follows :-- "(i) Where a petitioner makes a grievance of breach of promise on the part of the State in cases where an assurance or promise made by the State he has acted to his prejudice and predicament, but the agree- ment is short of a contract within the meaning of article 299 of the Constitution; (ii) Where the contract entered into between theperson aggrieved and the State is in exercise of a statutory power under certain Act or Rules framed thereunder and the petitioner alleges a breach on the pan of State; and (iii) Where the contract entered into between theState, and the person aggrieved is non-statutory and purely contractual and the rights and liabilities of the parties are governed by the terms of the contract, and the petitioner complains about breach of such contract by the State." 13. It rightly held that the cases such as Union of India v. M/s. AngloAfghan Ag....
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....this Court a proper forum for re-opening the concluded contracts with a view to getting back a part of the purchase price paid and the benefit taken. The undisputed facts are that petitioners offered themselves for registration for allotment of flats that may be constructed by the, Authority for MIG scheme. After the registration and when the flats were constructed and ready for occupation brochures were issued by the Authority. One such brochure for ', allotment of MIG flats in Lawrence Road residential scheme is Annexure R-1. This brochure specifies the terms and conditions including price on which flat will be offered. It also reserved the right to surrender or cancel the registration, the mode and method of paying the price and handing over the possession. There is an application form annexed to the brochure. Annexure 'A' to the brochure sets out the price of flat on the ground floor, first floor and second floor respectively. It sets out the premium amount payable for land as also the total cost in respect of the flats on the ground floor, first floor and second floor. The statement also shows the earnest money deposited at the time of the registration and the bala....
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.... violation of Art. 14 or of any other constitutional provision when the State or its agents, purporting to act within this field, perform any act. In this sphere, they can only claim rights conferred upon them by contract and are bound by the. terms of the contract only unless some statute steps in and confers some special statutory power or obligation on the State in the contractual field which is apart from contract" (see Radhakrishna Agarwal & Ors. v. State of Bihar & Ors.) Petitioners were under no obligation to seek allotment of flats even after they had registered themselves. They looked at the price and flats and applied for the flats. This they did voluntarily. hey were advised by the brochures to look at the flats before going in for the same. They were lucky enough to get allotment when the lots were drawn. Each one of them was allotted a flat and he paid the price voluntarily. They are now trying to wriggle out by an invidious method so as to get back a part of the purchase price not offering to return the benefit under the contract, namely, surrender of flat. I The Authority in its affidavit in reply in terms stated that it is. willing to take back the fiats and to repa....
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....ntract of lease. Hence, the question whether such contractual obligation can be enforced by the High Court in its writ jurisdiction. 9. Ordinarily, where a breach of contract is complained of, a party complaining of such breach may sue for specific performance of the contract, if contract is capable of being specifically performed, or the party may sue for damages. Such a suit would ordinarily be cognizable by the Civil Court. The High Court in its extraordinary jurisdiction would not entertain a petition either for specific performance of contract or for recovering damages. A right to relief flowing from a contract has to be claimed in a civil court where a suit for specific performance of contract or for damages could be filed. This is so well settled that no authority is needed. However, we may refer to a recent decision bearing on the subject. In Har Shankar and Ors. etc. etc. v. The Deputy Excise and Taxation Commissioner and Ors., the petitioners offered their bids in the auctions held for granting licences for the sale of liquor. Subsequently, the petitioners moved to invalidate the auctions challenging the power of the Financial Commissioner to grant liquor licence. Reje....
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....aid contract and are bound by the terms of the contract unless some statute steps in and confers some special statutory obligations on the part of the BDA in the contractual field. In the case before us, the contract between the respondents and the BDA does not contain any statutory terms and/or conditions. When the factual position is so, the High Court placing reliance on the decision in Ramana Dayaram Shetty case (AIR 1979 SC 1628) has erroneously held: "It has not been disputed that the contesting opposite party is included within the term 'other authority' mentioned under Article 12 of the Constitution. Therefore, the contesting opposite parties cannot be permitted to act arbitrarily with the principle which meets the test of reason and relevance. Where an author- ity appears acting unreasonably this Court is not powerless and a writ of mandamus can be issued for performing its duty free from arbitrariness or unreasonableness." 21. This finding, in our view, is not correct in the light of thefacts and circumstances of this case because in Ramana Dayaram Shetty case there was no concluded contract as in this case. Even conceding that the BDA has the trap- pings of ....
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....26 of the Constitution of lndia on the short ground that the appellant-petitioner was disputing the contractual obligations entered into by the parties under the ordinary law of contract. While dismissing the writ petition the High Court observed as under: "We feel on the facts and circumstances of this case that since only the petitioner has come before us, the proper remedy for the petitioner even otherwise is to go to the civil court and get the matter adjudicated in the suit. This is, nowever, without prejudice to the right of the petitioner to approach the IDBI by means of representation if they really have power to take action they can take necessary action if it is so desirable under that power against respondent 1." 75. In the Case of Improvement Trust Ropar Through Its Chairman vs. Tejinder Singh Gujral And Others reported in 1995 Supp (4) SCC 577 the Hon'ble Apex Court in paragraph no. 3 has observed as under:- "3. No writ petition can lie for recovery of an amount under a contract The High Court was clearly wrong in entertaining and allowing the petition There is no separate law for the advocates" 76. Yet in the case of State of Orissa vs. Narain Prasad and Others ....
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...., 20, 21, 22, 23, 24 has observed as under:- "19. There can be no dispute to the settled legal proposition that matters/disputes relating to contract cannot be agitated nor terms of the contract can be enforced through writ jurisdiction under Article 226 of the Constitution. Thus, writ court cannot be a forum to seek any relief based on terms and conditions incorporated in the agreement by the parties. (Vide: Bareilly Development Authority & Anr. v. Ajay Pal Singh & Ors., AIR 1989 SC 1076; and State of U.P. & Ors. v. Bridge & Roof Co. (India) Ltd., AIR 1996 SC 3515). 20. In Kerala State Electricity Board & Anr. v. Kurien E. Kalathil & Ors., AIR 2000 SC 2573, this Court held that a writ cannot lie to resolve a disputed question of fact, particularly to interpret the disputed terms of a contract observing as under: (SCC pp. 298-99, paras 10-11) "10.....The interpretation and implementation of a clause in a contract cannot be the subjectmatter of a writ petition. ....If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. We are also unable to agree with the observations of the High Court that the contractor was seeking enforcement....
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....hermore, the authority against whom mandamus is issued, should have rejected the demand earlier. Therefore, a demand and its subsequent refusal, either by words, or by conduct, are necessary to satisfy the court that the opposite party is determined to ignore the demand of the applicant with respect to the enforcement of his legal right. However, a demand may not be necessary when the same is manifest from the facts of the case, that is, when it is an empty formality, or when it is obvious that the opposite party would not consider the demand. IV. Interpretation of terms of contract 23. A party cannot claim anything more than what is coveredby the terms of contract, for the reason that contract is a transaction between the two parties and has been entered into with open eyes and understanding the nature of contract. Thus, contract being a creature of an agreement between two or more parties, has to be interpreted giving literal meanings unless, there is some ambiguity therein. The contract is to be interpreted giving the actual meaning to the words contained in the contract and it is not permissible for the court to make a new contract, however is reasonable, if the parties ha....
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....eeking a judicial intervention for resiling and wriggling from contractual obligations which are not within the realm of the present proceedings. 80. Another issue which needs to be taken note of is the fact as to whether a writ petition under Article 226 of the Constitution would lie seeking mandamus for only refund of money when the same is disputed. The said issue is no more res integra as in the case of Suganmal Vs. State of Madhya Pradesh reported in AIR 1965 Supreme Court page 1740 wherein the Hon'ble Apex Court observed as under:- "6. On the first point, we are of opinion that though the High Court have power to pass any appropriate order in the exercise of the powers conferred under article 226 of the Constitution, such a petition solely praying for the issue of a writ of mandamus directing the State to refund the money is not ordinarily maintainable for the simple reason that a claim for such a refund can always be made in a suit against the authority which had illegally collected the money as a tax. We have been referred to cases in which orders had been issued directing the state to refund taxes illegally collected, but all such had been those in which the petitions c....
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....urt was in error in coming to the conclusion that it was possible for the appellant to know about the legality of the tax sought to be imposed as early as 1963, when the Act in question was declared ultra vires as mentioned hereinbefore. Thereafter the taxes were paid in 1968. Therefore the claim in November, 1973 was belated. We are unable to agree with this conclusion. As mentioned hereinbefore the question that arises in this case is whether the Court should direct refund of the amount in question. Courts have made a distinction between those cases where a claimant approaches a High Court seeking relief of obtaining refund only and those where refund is sought as a consequential relief after striking down of the order of assessment etc. Normally speaking in a society governed by rule of law taxes should be paid by citizens as soon as they are due in accordance with law. Equally, as a corollary of the said statement of law it follows that taxes collected without the authority of law as in this case from a citizen should be refunded because no State has the right to receive or to retain taxes or monies realised from citizens without the authority of law. 7. In Suganmal v. State....
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....he petitioner to raise protest or challenge the Transfer Memorandum dated 24.12.2020, which became instrumental in deposit of the lease rentals and interest thereon. Hence, in the firm opinion of the Court, the interpretation so sought to be suggested by the petitioner that since the amount was deposited under protest, the petitioner is entitled to refund of the same is out of context besides being misconceived and misplaced. 84. Meticulously, analyzing the facts of the case in hand from the four corners of law this Court cannot subscribe to the argument of the learned Senior Counsel who appears for the petitioner as the controversy sought to raked up by the petitioner devolves around factual issues relating to the contractual obligation so embodied in the underline instruments be that the lease deed so executed from time to time or the Transfer Memorandum so executed between the parties. More so, the sale certificate itself has been issued after noticing the fact that the petitioner transferee (auction purchaser) is bound by the covenants contained in the lease deed as well as the Transfer Memorandum. Writ jurisdiction cannot be expanded in an elastic manner so as to stretch it t....